Hapner v. Rolf Brauchli, Inc.

Decision Date27 December 1978
Docket NumberDocket No. 58977,C,No. 4,4
Citation404 Mich. 160,273 N.W.2d 822
PartiesDeAnn HAPNER and Benjamin Hapner, Plaintiffs-Appellees, v. ROLF BRAUCHLI, INC., an Illinois Corporation, Defendant, and Solis Apparatus Manufactories, Ltd., an Alien Corporation, Defendant-Appellant. alendar404 Mich. 160, 273 N.W.2d 822
CourtMichigan Supreme Court

Goodman, Eden, Millender & Bedrosian by Robert A. Koory, Detroit, for plaintiffs-appellees.

Butzel, Fruhauf, Keidan, Simon, Myers & Graham, Detroit, for defendant-appellant(Douglas G. Graham and Richard P. Saslow, Detroit, on the brief).

LEVIN, Justice(for remand).

While I agree with my colleague that the requisite "minimum contracts"1 justifying the exercise of long-arm jurisdiction may be established without proof of "solicitation, sale or delivery within the state of injury by the defendant(manufacturer) to the plaintiff," an out-of-state manufacturer is not subject to Michigan long-arm jurisdiction merely because one of its products was brought into Michigan and caused harm to a Michigan resident and it was foreseeable that might occur."Proof alone that a non-resident caused an effect in Michigan that was foreseeable does not establish a relationship to Michigan such as to make it fair and reasonable to subject the non-resident to jurisdiction."2 Khalaf v. Bankers & Shippers Ins. Co., Mich., 273 N.W.2d 811(1978).

Unless products of the manufacturer are distributed in this state pursuant to its marketing system in such a manner and to such an extent that it can properly be said that the manufacturer has "purposefully avail(ed) itself of the privilege of conducting activities" within this state, 3 it does not ordinarily have "substantial connection"4 or requisite minimum contacts with this state justifying the exercise of long-arm jurisdiction.

A manufacturer's marketing system is generally seen as a purposeful availment of the privilege of acting in a forum in which it has reason to know its products are distributed pursuant to that system.

The record in the instant case shows only that products of the Swiss manufacturer, Solis Apparatus Manufactories, Ltd., are sold by it to independent importers located in New York, Chicago and Los Angeles.It does not appear whether any Solis products are distributed beyond the states of New York, Illinois and California as part of Solis' marketing system, and there is no basis for an inference either that its products were in fact distributed in Michigan or that Solis had reason to know that its products were distributed in Michigan through the system established for marketing them in this country.Absent such evidence, Michigan is not a "fair forum"5 although it is foreseeable that a purchaser in Illinois may be a Michigan resident or that an Illinois purchaser may bring or send the product to Michigan.

While the record does not support a finding that Solis purposefully availed itself of the privilege of conducting its activities in Michigan and that Michigan is a fair forum, it appears from other evidence not part of the record on appeal that Solis products have been extensively distributed in this state and that the failure of proof was inadvertent and so insubstantial that, appraising it in light of the unsettled state of the jurisprudence, the case should not on that account be dismissed.

I would remand to the trial court for further proceedings with leave to the plaintiff to adduce further proofs regarding the extent of Solis' availment of the privilege of conducting its activities in this state.

FITZGERALD, J., concurs.

RYAN, Justice(to reverse).

I agree with Justice Levin that a manufacturer's marketing system may generally be viewed as a purposeful availment of the privilege of acting in a forum in which it has reason to know its products are distributed pursuant to that system.And I agree that the record before us does not support a finding that the distribution system shown to be employed by defendant constituted such a purposeful availment.

However, I cannot countenance looking outside of the record to support a remand, in this instance, to allow plaintiff another opportunity to develop a factual record to support such a finding.Consequently, I would reverse the Court of Appeals.

COLEMAN, J., concurs.

MOODY, Justice.

This products liability action arose out of injuries sustained by the plaintiff, DeAnn Hapner, in Ann Arbor, Michigan, while using a portable hair dryer manufactured by the defendant, Solis, a Swiss corporation.The issue on appeal is whether the Court of Appeals, in holding Solis subject to the limited personal jurisdiction of a Michigan court, erred by exceeding the limits of constitutional due process.We conclude that the Court of Appeals did not err.

FACTS

In December, 1970, Benjamin Hapner purchased a portable "professional" hair dryer from his barber in Chicago as a present for his daughter DeAnn.DeAnn was then a high school senior living with her parents.As a college freshman, DeAnn took the hair dryer with her to the University of Michigan, Ann Arbor, in September of 1971.Several months later DeAnn noticed a noise in the dryer and took it home to Chicago for repairs.Subsequently, DeAnn brought the repaired hair dryer back to Ann Arbor, where, on January 28, 1972, she was injured by electrical shocks and was severely burned on both hands when the hair dryer came apart.

In February, 1973, plaintiffs filed suit in Michigan naming a Chicago distributor and an Illinois importer-wholesaler as defendants.Twenty months later, Solis, the Swiss manufacturer of the hair dryer, was added as a partydefendant.

Solis moved for an accelerated judgment on the grounds that the Michigan court lacked personal jurisdiction over it and that such jurisdiction would violate Solis' constitutional right to due process under the Fourteenth Amendment to the United States Constitution.Solis' affidavit submitted in support of this motion recited, in part, the following facts:

1.Solis is incorporated under the laws of Switzerland and has its principal place of business in Glattbrugg, Switzerland.

2.Solis maintains no offices, telephones, or bank accounts in the United States.

3.Solis has no sales or service representatives, no employees or agents in the United States.

4.Solis does not own, use or possess any real or tangible personal property situated within the United States.

5.Solis exports its products to the United States to three independent importers located in New York, Chicago and Los Angeles, but Solis does not control the business operations of its importers.

Acknowledging that the question before the court was a "very close one", the trial judge entered an accelerated judgment dismissing Solis from the case on the ground that Solis lacked the requisite minimum contacts with the state for a Michigan court to maintain jurisdiction without violating the defendant's right to due process of law.The Court of Appeals reversed and remanded.71 Mich.App. 263, 247 N.W.2d 375(1976).We granted leave to appeal.399 Mich. 882(1977).

I

Statutory authority for limited in personam jurisdiction over nonresident defendants is provided for in M.C.L. § 600.715;M.S.A. § 27A.715, which states in part:

"The existence of any of the following relationships between a corporation or its agent and the state shall constitute a sufficient basis of jurisdiction to enable the courts of record of this state to exercise limited personal jurisdiction over such corporation and to enable such courts to render personal judgments against such corporation arising out of the act or acts which create any of the following relationships:

"(2) The doing or causing any act to be done, or consequences to occur, in the state resulting in an action for tort."

Based upon the broad language of the statute, a nonresident defendant who causes injury to occur within this state may be subjected to the jurisdiction of Michigan courts without the defendant ever having been within the state boundaries.

In previous decisions, this Court has viewed the statute as an attempt by the Legislature to expand to its full potential limited personal jurisdiction of Michigan courts over nonresidents and, noting no constitutional problems, has liberally construed the statute.Sifers v. Horen, 385 Mich. 195, 188 N.W.2d 623(1971);Woods v. Edgewater Amusement Park, 381 Mich. 559, 165 N.W.2d 12(1969).Assuming the accuracy of plaintiffs' pleadings, defendant Solis did cause a consequence to occur in the state resulting in an action for tort and is subject to the limited jurisdiction of the statute.

Nevertheless, since the present controversy involves fewer contacts with Michigan than previously decided cases, this Court must examine the present facts within the context of the due process constitutional limitations established by the United States Supreme Court.Such analysis requires examination of three key cases involving in personam jurisdiction over nonresident defendants.

II

The modern constitutional test for the assertion of personal jurisdiction over a nonresident defendant by a state court was first set forth in the case of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95(1945).That case established the due process "minimum contacts" test.In order to subject a nonresident defendant to in personam jurisdiction, the defendant must have certain "minimum contacts" with the state such that the maintenance of suit does not offend traditional notions of fair play and substantial justice.Whether due process is satisfied depends upon the quality and nature of the nonresident's activity in relation to the fair and orderly administration of the state's law.International Shoe, supra, 319, 66 S.Ct. 154.Thus, constitutional jurisdiction over a nonresident defendant requires not only fairness to the defendant, but also a consideration of the forum state's interest in the...

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